That's madness - I can't imagine why they'd do that. Their money would be rapidly eroding away.
But also - remember almost every professional has a pension, which is always invested, so yes almost every professional owns stocks and shares.
I think your confusion is in assuming that this is something you do rather than it being the status quo that receives no attention.
Up until recently I had about $80k sitting in a HYSA while interest rates on that account dropped like a rock. I only really noticed that after crunching the numbers and figuring out that was much beyond what I would realistically need. It took a few days to figure out what I could do about that given my income and employment situation.
I'm not sure how much of this applies to someone who is natively middle-class, but I find that part of the luxury of having a good income and a minimal lifestyle is just not thinking about money. If that's where your baseline is then you need some other motivation to scrutinize your finances. It comes more easily to me because I find it interesting but I can see someone without that drive just letting cash sit and being satisfied that the number looks big enough.
Due to compound interest the amount you're effectively paying is going to keep going up every year. After 20 years the effective yearly fee you're paying for having that bank account is... $30k a year.
Maybe that $30k a year fee to store $100k is worth if to some people due to the government-backend security of bank deposits... but long term I think the dealer is always winning that game.
People need to learn about interest and compound interest in school.
And this is all before we even talk about inflation further eating into your pile. Money in a bank account is dead money - it'll rot away to nothing.
These kind of broad and boring investments always return about 5-10% or something like that a year. Occasionally they go down one year if there's a big bust up, but if you look over a ten year window it's always going up.
So why doesn't everyone invest in them if they're so dependable? Am I selling a get-rich-quick scheme? The reason is they're too modest for most people who are trying to get more like 15%. But those people take more risk - the kind of risk you're probably worried about.
And so why does the bank pay so little interest? Well they're getting that 5-10% from similar modest-return, low-risk investments (well probably a bit less less as they're more cautious)... and pocketing it.
I’ve been constantly invested in index funds for 10+ years, never sold a position, including before/after March 2020. Some positions I have are up more than 200%. A crash of 50% won’t do me too much damage, I’ll still be way, way far ahead of the many friends I have who have been in cash since 2015, repeating your same “a correction is likely, I’ll wait for the bottom to get in”.
I’m beginning to question the maxim that “you can’t time the market”... sure, you’re unlikely to time the exact top or bottom, but an approximation can result in significant risk reduction and/or upside.
Your advice is fine advice, if you already own your housing and have savings on top of that, which many or most people don't.
Only the richest have 6 months expenses in savings. Majority live paycheck-to-paycheck